Before the majority of the investment went towards capital expenses to build infrastructure. Now most of the invested capital goes towards salaries for the dev

Before the majority of the investment went towards capital expenses to build infrastructure. Now most of the invested capital goes towards salaries for the development of the idea. If the idea is successful then cloud computing is utilized to grow the business. If sufficient scale is reached then you'll see companies take large late rounds to build their own data centers and infrastructure out (such as Zynga and Facebook). So while total invested dollars are down, the cost to invest is down significantly and "big money" doesn't need to be spent until you know you have a success. VCs are poised to make much better returns over the next decade if they manage their funds correctly.